Family Business
Governance
Governance in a Family-Owned Enterprise
What Makes It Different
What makes governance unique in a Family-Owned Enterprise compared to a Non-Family Business Environment? The answer is easy; it’s the Family Factor. As a family business grows from an ‘owner-centric’ founder stage to stages where the ownership group is more diverse, the business and the family have different needs. It’s unlike before when one person was in charge of everything for the family and the business. Now, multiple family branches have a stake in the decisions. So how do you go from one captain steering the ship to many sailors wanting to have a voice in how the ship sails, survives and is run? This is governance, and unlike other organizing models, governance in family-owned enterprises develops into two models: business governance and family governance.
Business Governance is Corporate Governance
Transitioning from a ‘paper board’ that never really meets to family-only boards and eventually to a diverse board of directors made up of family and non-family members is vital as the business grows, thrives, and more shareholders appear. Corporate Board evolution can be daunting for family leaders, moving from strong solo control to effective board decision-making policies, constructive debate, and providing management with oversight and accountability. “Letting go to grow” is our motto, and we walk with you side-by-side to build your corporate governance model.
Family Governance – Creating Alignment and Harmony
The secret to a thriving family enterprise is to separate family and business decisions. This can be hard because people often have multiple roles; they may be family members, family employees, shareholders, board members, or married-in to the family. It’s challenging – or even impossible to escape all conflicts between what they want for themselves versus how well things turn out when their family’s futures are at stake! By creating fair procedures, systems, policies, and transparent decision-making, we help your family create a family governance structure that matches the diverse needs of your unique family enterprise and dodge the potential problems that damage family relationships. Good governance makes family-owned enterprises harmonious; like a beautiful melody, it doesn’t just happen. It takes time, practice, and a well-written sheet of music. Let us help you write a stunning music score!
The challenges of forming a family governance structure:
- Structure and culture of open communication among family members.
- Need to value family above individuals.
- Demonstrating competence when assigning responsibility for tasks at hand.
- An established generational succession plan in place.
- There needs to be a process in place for family conflict management.
- The family governance plan needs to be developed and maintained
Hear what others are saying
"Charleston Metro Chamber of Commerce is more than 250 years old; our people and progress are at the heart of our success. Since 2015 we have worked closely with Positively People as a key partner for our leadership development programming. Using their Everything DiSC and team-building resources, Positively People has engaged with over 1400+ leaders passionately supporting our work to advance our region."
Bryan Derreberry
CEO/President
"Dr. Jean and her entire team are world class consultants who deeply understand the dynamics of the G2, G3 and G4. Through her invaluable experience, our family transitioning from G2 to G3 was able to align and engage with her and each other, through effective and efficient modes of communication and coordination. She brought the whole family together on this journey; creating a shared vision, motivating each other, raising expectations, promoting trust and achieving a structure that will allow for an enterprise and large family to thrive for generations. A game changer. Truly world class."
Mayur Shah
G2 Family Member, Managing Director of Kenafric Group
We have been a family-owning business for over five decades. We currently have four rapidly-
growing generations of family members, with several second and third-generation members
actively working in the day-to-day business. Hiring a business consultant, but more for the family
business aspect, was an idea that was always thrown around. Knowing the many different family
dynamics, we knew it wouldn’t be easy. We knew it eventually had to be done, but we were still
“flying by the seat of our pants” like we were known to do. None of us realized the complexity of
trying to successfully preserve the legacy of a family business, “successfully” being the
keyword…until we met Jean. We were introduced to Jean in 2018, hoping she could help us navigate
the second generation’s strategic exit while supporting the third generation’s succession. As we
entered unchartered waters, we couldn’t articulate precisely what we needed, but we knew we
needed her guidance & expertise if we didn’t want to become a statistic. Fast-forward to 2023, and
thanks to her guidance, patience, tough love, and professionalism, we are on the right path to
continuing to thrive into the third generation and beyond with our never-before-established
systems and procedures (i.e., our fully-developed family governance). We have also successfully
implemented career paths for the NextGens while creating various helpful tools for them to use
along the way. Jean and her team at Positively People are as emotionally and mentally invested in
our family business as we are. Knowing they are walking with us and helping to define a clear path
forward for the continuity of our enterprise and its legacy as we all transition is invaluable.
Elizabeth Bondy DeLacerda
Employee Relations/Human Resources
